Got an IRS CP2000B letter about unreported income - need advice!

The CP2000B is basically the IRS saying they've found a discrepancy between what was reported to them and what you reported on your return. It's not an audit, just a proposed adjustment. For the unemployment income, you can simply respond to the notice and agree to pay the tax on the $1,800. You don't necessarily need to file an amended return just for this if you're responding to the CP2000. As for the gambling situation, this is where things get tricky. Gambling losses can only be deducted up to the amount of your gambling winnings, and only if you itemize deductions on Schedule A (rather than taking the standard deduction). If you didn't report the winnings OR the losses on your original return, you'll need to respond with documentation showing both. You can respond now with the documentation you have, explaining that you're waiting for additional proof of losses. Include a clear statement that your total losses exceeded your winnings. The IRS may give you additional time to submit the remaining documentation. Gambling transactions need to be properly documented to be valid, so make sure your profit/loss statements are from legitimate sources and show all relevant details.

After dealing with a very similar CP2000 situation (unreported income + gambling winnings issues), I found taxr.ai (https://taxr.ai) incredibly helpful. It seriously saved me hours of confusion trying to figure out how to properly document everything. I uploaded my CP2000 letter, my tax return, and my win/loss statements to their system, and it basically analyzed everything and showed me exactly what I needed to respond with. It specifically told me what forms I needed for the gambling stuff (Schedule A for itemizing losses against winnings) and generated a response letter that addressed all the IRS claims. The tool actually flagged several deductions I had missed that helped offset some of the tax impact. Might be worth checking out if you're feeling overwhelmed by all this.

I wanted to update after trying out taxr.ai for my CP2000 gambling issue. I was super skeptical (as you can see from my earlier comment), but it actually worked incredibly well for my situation. My case was really similar - had about $60K in unreported gambling winnings with losses that exceeded that amount. The system walked me through exactly how to document everything properly and made sure I itemized correctly on Schedule A. The response letter it generated addressed every specific issue from the CP2000 notice. The IRS accepted my response without any additional questions! The most valuable part was that it flagged issues with some of my documentation that probably would have triggered further review. Definitely saved me from making things worse.

If you're struggling to get through to the IRS about your CP2000 notice (I was on hold for 2+ hours repeatedly), try Claimyr (https://claimyr.com). I was getting desperate because my deadline was approaching, and my case needed some explanation beyond just sending forms. They have this service where they basically hold your place in the IRS phone queue and call you when an actual human IRS agent is on the line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was super skeptical that it would actually work, but I got connected with an IRS agent in about 45 minutes (after spending days trying on my own). The agent was able to put notes on my account about the pending documentation and gave me a direct fax number to send my gambling loss statements when they arrived.

Wanted to follow up on my skeptical comment about Claimyr. I'm actually shocked to report that it worked perfectly. After failing to reach the IRS for a week straight (either disconnected or couldn't stay on hold), I gave in and tried the service. Got connected to an IRS agent in 37 minutes while I was making dinner. The agent was able to put a hold on my case while waiting for my final documentation and gave me specific instructions on exactly what they needed to see to accept my gambling loss claims. I managed to get everything submitted 2 days before my deadline, and the agent I spoke with actually noted in my file that I had contacted them about the missing documentation. That alone was worth it since it shows I was being proactive before the deadline.

Make sure you send your response CERTIFIED MAIL with return receipt!!! I had a similar situation and the IRS claimed they never received my response even though I sent it. Had to go through the whole process again and almost got hit with penalties. Also, for the gambling stuff, make sure your statements are really detailed. If you used a players card at the casinos, request official win/loss statements from each casino. Those carry more weight than just bank statements or personal records.

Don't forget you might need to pay state taxes on that unreported income too! The IRS typically shares this information with your state tax authority, so you might get a similar notice from them in a few months.

Make sure you respond by the deadline even if you don't have all your documentation yet! You can send a partial response explaining that additional documentation is coming. If you miss the deadline without any response, they may assess the full tax amount automatically. I had a CP2000 for unreported stock sales last year, and the key was keeping communication open with the IRS. They're actually pretty reasonable if you're responsive and can explain your situation.